Moody’s Lifts Minerva Ahead of Bond Sale

Moody’s has upgraded Minerva to B1 from B2 ahead of the Brazilian meatpacker’s proposed $500m 2023 bond sale, it says. The upgrade reflects the improvement in the company’s capital structure following the equity issuance of BRL457m [$225m] in early December. “As a result of the equity offering, adjusted leverage is expected to decline meaningfully to about 4.5x at the end of 2012 as most proceeds were used to repay debt,” it says. The upgrade also considers Minerva’s comfortable liquidity profile and an expectation that the company’s credit metrics will continue to improve over the medium-term thanks to favorable fundamentals for the beef segment in Brazil. The outlook is stable. Minerva is visiting accounts in London, New York, Boston and Los Angeles through Wednesday. It launched last week a cash tender offer targeting its 9.500% 2017, 10.875% 2019 and 12.250% 2022 bonds, to be funded with proceeds from the new 2023 sale. Minerva is offering $1,105 per $1,000 principal of the 2017s, $1,200 per $1,000 of the 2019 and $1,262 per $1,000 of the 2022. The prices include a $30 per $1,000 bonus for holders accepting before a January 25 early deadline. The full offer expires February 8. There is $34m outstanding in the 2017 bond, $372m in the 2019 and $450m in the 2022, and Minerva has set a $500m cap on the buyback. BTG Pactual, HSBC and Credit Suisse are managing the tender and new issue.